Tyrosine phosphorylation is a fundamental regulatory mechanism for numerous important aspects of human cellular physiology in health and disease. This process is controlled by coordinate action of protein tyrosine kinases and phosphatases. Deregulation of the process has major pathological implications. Polycythemia vera (PV) is a clonal hematologic disease characterized by excessive production of red cells, granulocytes, and platelets in blood. In earlier studies, we found that PV erythroid progenitor cells display enhanced activity of tyrosine phosphatase MEG2. We further revealed that the increased MEG2 activity was due to an elevated distribution of the enzyme into the membrane fraction of erythroid colony-forming cells which may be caused by altered distribution of specific phospholipids. The essential role of MEG2 in erythropoiesis is evident in that retrovirus-mediated gene transfer of dominant negative mutants of MEG2 or RNAi suppressed growth and development of erythroid cells in vitro. Recently, we have made a major breakthrough in the study of PV by identifying a mutation of the JAK2 tyrosine kinase in over 80% of PV patients. The JAK2 mutation is acquired and causes constitutive activation of JAK2 tyrosine kinase activity and downstream signaling components including ERKs, Akt, and STATS. We further found that the mutant JAK2 (JAK2VF) phosphorylates and activates MEG2. By focusing on the function and regulation of MEG2, this study is intended to reveal how normal hematopoiesis is controlled and how JAK2VF causes PV. We will generate transgenic mice expressing JAK2VF and a constitutively active form of MEG2 to produce mouse PV models. We will thoroughly investigate in vivo and in vitro the development of hematopoietic cells from these mice. By knocking down the expression of MEG2 with RNAi in hematopoietic progenitor cells with or without JAK2 mutation, we will reveal the involvement of MEG2 in cell development and cell signaling under normal and PV conditions. We will perform further biochemical characterization of the MEG2/phospholipids interaction, determine the effects of tyrosine phosphorylation and lipid binding on activity and membrane localization of MEG2, and investigate possible abnormal levels and distribution of phospholipids in PV cells. This study should provide insight into the mechanism by which MEG2 regulates hematopoiesis. It may also allow us to define both JAK2 and MEG2 as potential targets for the development of therapeutic drugs to treat PV in the future.